USDKRW has dropped 0.5% to range lows....>

KOREAN WON: USDKRW has dropped 0.5% to range lows at the 1115 level which brings

the 200dma at 1111.76 into play. The won's rally reflects broad based dollar

weakness but it has also outperformed the yen on the day to send KRWJPY back

through the 9.80 level despite some risk off in equity markets.

- The recovery in KRWJPY comes despite the real yield spread between the two

countries heading to fresh cycle lows thanks as Japanese real yields push higher

amid the continued drop in inflation expectations. A large gap has opened up

once again between the the currency pair and fair value based on its historical

relationship with real yield spreads.